To date, the antitrust actions of regulators worldwide toward Intel have focused on sale practices for central processing units, or CPUs, a market over which the company has fought heavily with Advanced Micro Devices. On Wednesday, however, the FTC spelled out a litany of allegations about Intel's alleged anticompetitive behavior in the market for graphics-processing units, or GPUs, in which Nvidia is a major player.

Nvidia is the world's leading supplier of "discrete," or standalone, graphics chips but takes a distant second place in overall market share to Intel, which supplies "integrated" graphics built into the chipsets that accompany all of its processors. Mercury Research estimates the total market for graphics chips, including integrated graphics, at almost $10 billion in 2009.

Why graphics, and why now? "It would be really hard to sell the public on expending resources to take Intel through administrative proceedings when it had already paid over a billion dollars to AMD," said Joshua D. Wright, a professor at George Mason University School of Law and a scholar in residence at the Federal Trade Commission until 2008.

"[The FTC] needed to be seen as doing something new," Wright said.

"[Nvidia] becomes the remaining star witness, now that AMD has left the field," said Roger Kay, principal at Endpoint Technologies. "And the FTC's focus, which begins to look toward the future, has to take into account how graphics will fit in as computer technology develops," Kay said.

Intel General Counsel Doug Melamed asserted in a statement that the FTC complaint "is based largely on claims that the FTC added at the last minute and has not investigated," referring to the GPU allegations. And Melamed added in a conference call that some of these GPU allegations were made as recently as December 8.

One of the areas the FTC case zeroes in on is the burgeoning competition for chipsets in Netbooks--small, inexpensive laptops that are typically priced around $350. Netbooks are powered by Intel's Atom processor--and integrated graphics silicon built into the chipset. In this market, Nvidia also sells its Ion chipset, which competes with Intel's integrated graphics product.

"To combat [Atom] competition, Intel charged [PC makers] significantly higher prices because they used a non-Intel graphics chipset or GPU. Intel would offer the bundled pricing only to OEMs that would then use the Intel chipset in the end product--and not use a competitive product," the FTC said.

Nvidia CEO Jen Hsun Huang on Wednesday chimed in with a statement. "Today's filing is sorely needed to stop Intel from using unlawful tactics to lock out the GPU and block consumers from its revolutionary benefits," he said.

And he provided more detailed allegations to CNET last month. "A customer can't even choose to resell the chipset and use Ion instead. What's the point of Nvidia getting an Intel bus license, if it's impossible to overcome Intel's pricing bundles?" Huang said in a statement provided to CNET.

Specifically, Huang accused Intel of offering the Atom bundle (a total of three chips) for $25; but if vendors switched to an Nvidia solution (which requires only one Intel chip) based on the Ion chipset, Intel would charge $45, according to Huang.

Intel says what it is doing is legal. "It's all above cost. And that meets the legal standard worldwide," Intel spokesman Chuck Mulloy said.

In Netbooks, Nvidia has made some headway this year: its Ion chipset has been used in Netbooks from Hewlett-Packard and Lenovo, among others, and Huang concedes this.

On top of the charges related to the Atom processor, there's a second major front in the FTC complaint, which stems from an Intel legal action filed in February that forced Nvidia to halt development of chipsets for Intel's new "Nehalem" processor technology (marketed as the Core i series of chips).

Intel said in its motion for a declaratory judgment that the 4-year-old chipset license agreement with Nvidia does not extend to Intel's future-generation processors with "integrated memory controllers," which includes Intel's newest Nehalem Core i processors. Intel contends that it discussed the matter with Nvidia for more than a year and that the two sides simply couldn't reach an agreement.

About the author

Brooke Crothers writes about mobile computer systems, including laptops, tablets, smartphones: how they define the computing experience and the hardware that makes them tick. He has served as an editor at large at CNET News and a contributing reporter to The New York Times' Bits and Technology sections. His interest in things small began when living in Tokyo in a very small apartment for a very long time.
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